UPDATE: Compaq Licenses Alpha to Intel

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About four years after the Federal Trade Commission blocked Intel Corp.’s effort to acquire the Alpha microprocessor, Intel finally got what it wanted.

Compaq Computer Corp., Houston, licensed the Alpha to Intel on Monday, a non-exclusive deal that still will probably be a death knell for the troubled chip. Compaq has committed to the Alpha at least through 2003, but then will consolidate its entire server line on Intel’s 64-bit Itanium by 2004.

Online news service The Inquirer first reported last week that Compaq was divesting its Alpha business, most likely to Intel.

Customers want highly scalable infrastructure on the front end and highly-parallel computing building blocks on the back end, Capellas said. “We know our customers want more flexibility,” he said.

The deal shakes up the small camp of Alpha followers and customers, including API Networks, once named Alpha Processor Inc. The Concord, Mass.-based manufacturer of Alpha-based chipsets and motherboards indicated that it would move closer to AMD, but still design for the Alpha infrastructure while it lasts.

“It was a great architecture,” said Terry Shannon, author of the Shannon Knows Compaq newsletter. “It was the fastest architecture, with a couple of exceptions, thanks to marketing strategic blunders of the first order. The Digital Alpha group became the gang that couldn’t shoot straight.”

Shannon said the Alpha team was just about to stake a real claim to legitimacy: the 1-GHz Alpha version is scheduled to ship July 10. By 2003, Compaq is due to increase the speed of its Himalaya mainframes twice, while increasing the speed of the EV-6 processor twice as well. Marvel, a 128-processoe mesh that will succeed the Wildfire lineup, is due in 2002, Shannon said.

As part of the deal, Compaq also said it will move its operating systems–including Tru64 Unix, OpenVMS and NonStop Kernel–to Itanium. The two companies also have agreed to jointly develop high-end products in the future.

Shannon said it was likely that the “hardware lockstepping” protocols of the EV-7 and the symmetric multi-threading capabilities of the EV-8 would find their way into future Itanium chips. The technology won’t be available until at least the Madison/Deerfield timeframe in 2003 or 2004, although Paul Otellini, executive vice-president and general manager of the Intel Architecture Group at Intel, said the technology would “absolutely” accelerate the Itanium roadmap.

The deal will also transfer “a few hundreds” of engineers from the Compaq Alpha team to Intel, Compaq executives said, where they will be especially useful in designing next-generation compilers for the chip. Itanium’s EPIC parallelism places much of the chip’s thread speculation in the compiler, which translates the code into machine instructions before the chip even begins to operate.

“Typically we would hire engineers from college; this time we’re hiring world-class engineers,” Otellini said.

The deal makes IBM’s Power chips and Sun Microsystems Inc.’s Sparc processors as the only current proprietary server chip architectures in the computing world. But the Compaq deal also locks Advanced Micro Devices Inc.’s forthcoming X86-64 family, the Hammer, out of Compaq. The Clawhammer and Sledgehammer chips are due in volume next year. Dell Computer Corp., Micron Electronics Inc., Hewlett-Packard Co., and Unisys Corp., among others, all have publicly stated they will use the Itanium.

The bottom line? Commoditization, the same force that has boosted Intel’s revenues while making the hardware business even more difficult to be in. “You take standard building blocks and layer value-added services over them,” Capellas said.

Shannon said that it will take about 18 months to port the Open VMS software to Itanium, after which time it was conceivable that a company like Dell could be licensed the software.

The deal may not be looked at by the Federal Trade Commission, the same organization that stepped in when Intel tried to acquire the Alpha chip outright in 1997.

Both Capellas and Intel chief executive Craig Barrett said that they had evaluated the potential anti-competitive aspects of the deal and ruled them out; repeated calls to Rhett Krulla, the assistant deputy director responsible for evaluating mergers in the computer industry, went unreturned. Samsung Electronics Inc. also has an Alpha license.

On the other hand, API NetWorks executives didn’t seem all that concerned. Tom Morris, director of product marketing and technology strategy, said that the company had begun shifting away from the Alpha two years ago and most recently last year, when the firm changed its name from Alpha Processor Inc. to API Networks Inc.

“We’ll work more closely with AMD, with whom we already have a strong working relationship,” Morris said. API Networks has already started working closely with AMD in designing AMD’s HyperTransport I/O protocol into future products, he added.

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